Israel on Tuesday put its postal service on the block after completing a recovery and financial stabilization process and formulating a strategic plan for the coming years.
The state’s privatization agency said it would sell 100% of Israel Post Co. to an investor or group of investors. Bids are due by September and the winning bid is expected by the first quarter of 2024.
A year ago, the government had scrapped a plan to sell 40% of the financially strapped postal service in a Tel Aviv share offering, with the remaining 60% slated to be sold to a strategic investor.
Saving Israel's postal service
Over the past year, Israel Post underwent an austerity and recovery plan of reducing payroll expenses, moving to digital services, closing branches while opening hundreds of delivery centers and transferring a significant portion of its assets to the state.
“The privatization of the mail is great news - for the economy, the treasury, and much more for the general public, who will receive a more efficient, faster and higher quality service,” said Michal Rosenbaum, director of the Government Companies Authority, predicting “investors will show great interest.”
Israel Post chairman Mishael Vaknin noted that just 18 months ago the company had a going concern warning, a huge drop in market share and many disappointed customers but under new management, it had now become much more efficient with the retirement of 20% of its workforce.
In addition to traditional mail and fast delivery services, Israel Post includes the Postal Bank, which has some 1 million active customers. It noted that the Postal Bank and e-Commerce are its main growth engines.
Israel Post also owns 278 real estate assets valued at around 600 million shekels ($162 million), it said.
In the first quarter, the company posted adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 67 million shekels and it estimated an adjusted EBITDA of 235 million shekels in 2023 after a 36 million shekel loss in 2022. ($1 = 3.7085 shekels)